Philadelphia (1114)

Recent media attention, including ubiquitous coverage of the Target Corp. security breach over the holidays, has highlighted the increase in security intrusions affecting organizations across industries. As technology moves forward exponentially, security threats and leaks continue to emerge.

“In the digital age, nearly every company holds personally identifiable information of its employees or customers in digital form,” says Christina D. Frangiosa, an attorney at Semanoff Ormsby Greenberg & Torchia, LLC. “It’s imperative that this information is protected from unauthorized disclosure and that companies have a plan to address any breaches.”

Smart Business spoke with Frangiosa about data protection, the role of state laws when it comes to breaches and the importance of assembling a strong data breach response plan.

How should a business go about protecting the data it collects?

First, it’s important to understand what kind of data are collected and what are stored. For instance, some companies collect credit card numbers in order to process transactions, but don’t keep them.

Once a company understands what it stores, it’s important to understand where the data are kept and who has access to them. Companies should limit access to relevant personnel and ensure that security protocols are up to date. If vendors or third parties will have access to these data, it is important to understand their policies so the company’s privacy policies can accurately reflect them.

Customers need to know what the company is going to do with their personal information before they entrust it. It’s essential that a company abide by the privacy policies it announces.

How should a business proceed if it experiences a data breach?

The first question to ask is, ‘What has been accessed and how many people have been exposed?’ Then it’s important to act quickly. Hopefully, the company already has a plan in place for locking down the data to prevent further breaches, for investigating the source and nature of the breach, and for notifying affected individuals. State laws will govern when and how affected individuals need to be notified.

What role do state laws play in notifying affected individuals?

Forty-six out of the fifty states have implemented data breach notification laws. Companies should consider such laws in each state where their customers reside or where they do business. These laws provide the timeline for reaching out to individuals affected by a data breach and, potentially, notifying credit agencies. The notification may need to happen very quickly after the breach occurs. Some data breach notification statutes provide exceptions to the notification requirement. However, companies should plan ahead so they know what their obligations are and are able to meet them promptly.

What type of personnel should be included in a data breach response team?

A data breach response team should include not only internal personnel — like IT, HR, legal counsel, facilities management, and upper management — but also external resources, such as forensic investigators, law enforcement, notification firms and consumer fraud protection agencies. It’s also important to enlist publicity/marketing personnel to help craft public communications about certain breaches. A security breach can have a negative impact on a company’s reputation. For instance, Target reported that its profits plunged 46 percent in the fourth quarter of 2013, largely due to revelations of customer data theft.  Preventing further loss will be important.

Why is it so important for companies to be proactive about data security?

If a breach occurs, there will only be a short window of time in which the company has to act. Companies that have prepared in advance and developed a response plan will be in a better position to protect themselves, their customers and their employees. It’s important to reach out to potential resolution partners before there is an issue so that the company can complete its own assessment of available services and costs without needing to make immediate decisions in response to a ticking clock.

Christina D. Frangiosa is an attorney at Semanoff Ormsby Greenberg & Torchia, LLC. Reach her at (267) 620-1902 or

Insights Legal Affairs is brought to you by Semanoff Ormsby Greenberg & Torchia, LLC

If I were to identify one book pivotal to my company’s success, it would be “Execution” by Larry Bossidy and Ram Charan. Simply put, it shows how to get the job done and deliver results … whether you are running a company or in your first management job — plus, it is chock full of real-life examples that reinforce each salient point.

In my infinite wisdom, I thought I knew the true meaning of execution. You just set a goal and eliminate all obstacles. Right? Wrong! What I learned from the book was how little I knew about execution in its truest sense. The book brought clarity to my definition and drove home the fact that to fully understand execution, companies large and small need to keep three key points in mind:

  • Execution is a discipline.
  • Execution must be job No. 1 for business leaders today.
  • Execution must be at the centerpiece of any organization’s culture.

With these three points as a backdrop to our execution strategy, what specific action steps are we taking to support our strategy?

Step No. 1. Engage in regular and sound strategic thinking at all levels of the organization.
Embrace the Rockefeller habits and hold daily meetings with all teams and departments to see what successes and challenges are ahead for them. Post core values prominently around the office and liberally reference them during conversations each day.

Step No. 2. Establish the organization’s top priorities.
Meet with top management in the fourth quarter to develop priorities for the following year. Limit those priorities to a maximum of three to five. Commit to writing and prominently display those priorities around the office. Review them quarterly with the entire staff.

Step No. 3. Create organizational clarity and alignment for all associates.
Devote a portion of each staff meeting to reviewing values and what they mean to both internal and external customers. Go to great lengths to explain not so much the “what” but rather the “why” of their hard work and its meaning within the organization.

Step No. 4. Use every opportunity to reinforce organizational alignment.
How do they say it … tell them, tell them again … tell them again. From time to time, show examples of what misalignment can mean to the organization. And celebrate how true alignment benefits everyone.

Our company has enthusiastically embraced these four action steps, and its success surpassed my wildest expectations. The results were a more engaged workforce, a better understanding and appreciation of our own talent pool and an elevated respect of everyone’s role within the organization.

How many of us feel, in the football vernacular, that we get to the 5-yard line and fumble? By embracing some of these techniques, you will be well on your way to the Super Bowl. By adopting these strategies, it has proven beyond a shadow of a doubt to be our “secret sauce” to success by way of embracing strategic execution.

G.A. Taylor Fernley is President and CEO at Fernley & Fernley, an association management company providing professional management services to nonprofit organizations since 1886.

Connect on LinkedIn:

G.A. Taylor Fernley:
Fernley & Fernley:

How to reach: or


When considering what to showcase for the new “Uniquely Philadelphia” feature in Smart Business Philadelphia, the Mütter Museum instantly came to mind. It’s known worldwide and certainly has many items that can be considered unique.

But, as Communications Director J. Nathan Bazzel is quick to point out, the Mütter Museum at the College of Physicians of Philadelphia is much more than a collection of oddities that attracts curiosity seekers.

“People assume that there’s one type of person that comes to the museum. And nothing could be further from the truth,” Bazzel says.

Sharing the human experience

Not everyone has an interest in art, so some people wouldn’t want to visit an art museum. But everyone has an interest in what it means to be human, he says.

“That’s what the museum is about. It’s not about the macabre. Yes, it’s about medicine. But more so, it’s about what it means to be human,” Bazzel says.

Plenty of celebrities have been among the museum’s visitors and Bazzel shared some of what they considered to be the top attractions.

“Teller, of Penn and Teller, would probably tell you it was the Hyrtl skulls, while Penn Jillette would probably say the giant. Anthony Bourdain was very attracted to the giant colon,” he says. “That’s the thing — when people visit, they bring their own life experiences with them.”

Opening access

Attendance at the Mütter Museum has grown to 140,000 visitors annually, which Bazzel says is the result of being accessible and letting the public know it exists.

That includes a YouTube channel that has more than 4,000 subscribers, making it more popular than The Louvre’s and on par with the British Museum.

“We also have more views than the Guggenheim in New York. So we’re very active on social media. People can connect with us from anywhere in the world. And not just connect with our words, but they can view our collections,” he says.

The museum has been featured on television, as well as in The New York Times, USA Today and The Washington Post.

“I don’t know of any news agency that has not, in some way, covered something here at the Mütter Museum,” Bazzel says.

Furthering medical science

As fascinating as it is to see a plaster death cast of conjoined twins Chang and Eng or the tallest skeleton on display in North America, the Mütter Museum hasn’t strayed from its original purpose of advancing the cause of health.

Bazzel says the importance of that mission has only increased as health care has grown to encompass 19 percent of the gross domestic product.

“It’s probably going to be at 21, 22 percent pretty soon. So we all have an interest in health care. Part of the interest of the museum is how far we have come in health, and how what used to be considered untreatable is now handled routinely,” Bazzel says.

“Who knows, maybe someone will walk out of here and take a little better care of themselves. That might help lower our GDP.”

Roger Vozar is associate editor at Smart Business Philadelphia. If you have an interesting story to share about a person or business making a difference in Philadelphia, please sent an email to

As the economy moves away from recession, many privately held companies are finding themselves with available cash and are deciding how it can be best utilized.

“They’re calling and asking, ‘Do I acquire a business, or start a new product line? Or do we further incentivize our top performers?’” says Tyler A. Ridgeway, director of Human Capital Resources at Kreischer Miller.

Many companies are aggressively looking for top talent, and you need to act quickly to attract ‘A’ players and ensure your best performers don’t leave. Top executives are landing jobs more quickly than ever, Ridgeway says.

Smart Business spoke with Ridgeway about retention methods that will motivate key employees.

How can an owner identify which employees are indispensable?

If you went to the office on Monday and someone gave notice, whose departure would make you feel irreparably harmed? Think about the key people you need to take your company to the next level of growth. Also, consider who you consult with when making a critical or strategic decision. These are the employees who need to be the focus of your retention efforts.

What financial rewards are being used to retain employees?

Total compensation is important, but it’s not always about base pay. Companies are using phantom stock plans, stock appreciation rights or a pool of money tied into company growth. For instance, if a $10 million company grows to $15 million, a portion of that $5 million difference can be divided among key performers and put into a pool that can act as a retirement benefit or, if the business is sold, would vest immediately. These types of programs can be used to attract top talent to your company or reinforce the desire of your existing team to stay and contribute at a high level.

You can also set bonuses on a team or individual basis. For individuals, percentages can be tied to specific goals you expect your executives to accomplish, such as qualitative metrics or projects to be completed.

It’s also advisable to add subjective items so the team is rewarded if the company has a really profitable year. Executives are willing to share risks, and they want additional cash if they put forth the effort and the company grows. A situation in which someone can contribute strategically, and reports to the ownership, is very attractive when you offer some type of upside if the company grows.

What are some other retention strategies?

Health care and flex time are still important. Health care negotiations are all over the map, and how a company addresses this key employee benefit can act as a strong motivator for top performers to stay.

Vacation time and flex time are also important because businesses are operating in a 24/7 environment; an executive may not be in the office all the time, but he or she is almost always plugged in. Organizations that take into account their employees’ personal lives and offer flexible work arrangements will be viewed as the best companies to work for.

Employee engagement also is important. If you can create an environment where employees at all levels understand their importance and role within the organization, and how they contribute to the growth of the business, it will be easier to retain them. When that breaks down and someone doesn’t feel they’re contributing or engaged, you risk losing that person.

Employee retention is not like a best practice environment; you have to know your organization and what motivates your employees. Most organizations now have four generations in their workforce and they’re all motivated differently. Figure out what motivates your employees and be flexible in creating policies that encourage them to stay and operate as cohesive, engaged teams.

Tyler A. Ridgeway is director of Human Capital Resources at Kreischer Miller. Reach him at (215) 734-1609 or

Insights Accounting & Consulting is brought to you by Kreischer Miller

Building out an effective telecommunication and technology infrastructure that meets current needs in the most cost-effective manner possible while providing a base for expansion isn’t an exact science.

You need to account for future changes in the nature of work within your organization and with your partners, customers and suppliers, keeping in mind that working models are becoming more flexible and customer contact is increasing.

You also must consider specific needs, such as security, disaster recovery, technology performance requirements, public/private boundary controls within systems and networks, and critical tools and datasets.

If you underestimate your needs, you could end up needing a complete technology replacement — an expensive proposition. If you overestimate, you may be paying today for services you never actually need.

It’s no wonder that business owners find this a challenging task, especially when so many factors affecting growth are outside of their control.

Smart Business spoke with Kevin Conmy, regional vice president for Comcast Business, about implementing technology infrastructure that is geared for today and ready for tomorrow.

What are some key considerations to planning for growth?

You must first determine your current baselines with existing systems, hardware, software, policies, etc. Then, audit each to see how your infrastructure can serve as a foundation for growth. Plans should include benchmarks that trigger technology upgrades, but there should also be a budget built into the plan to ensure the business has adequate technology to achieve its initial growth targets and increase the chances of hitting those triggers.

Technology tends to get better and less expensive over time, so be careful about purchasing the ‘latest and greatest’ without careful analysis, such as creating a pro-and-con list. You may be surprised by what you really need. There’s a great story about Americans designing a special ‘space pen’ that could write in zero gravity, while the Russians used a pencil.

Remember that technology rarely solves a business problem on its own; it needs to be married to a core business process or user behavior.

How are the cloud and bandwidth affecting these infrastructure plans?

Cloud-based services are changing the game for all aspects of technology infrastructure, including telephony, Internet access and applications — allowing small and midsize business to more easily scale. With each technology system, weigh whether it’s more cost-effective to run services in-house or outsource them as third-party applications hosted externally.

Bandwidth is a key enabler. As users add Wi-Fi, move to cloud apps, stream video and bring devices to work, the demand for bandwidth is escalating exponentially. You need to consider the number of current users accessing your networks and the kinds of applications they are using, as well as the user growth you expect. If employees and customers both need Wi-Fi, you may want separate services so the public Wi-Fi doesn’t affect your private network’s speed.

This is a complex equation; do you have tips for the right approach?

Many companies that have implemented a technology infrastructure geared toward growth recommend that unless a particular technology promises to solve a major pain point, being a little late in adopting a new technology is conservative and smart.

Even with proven technologies and a carefully designed proof of concept, a phased rollout should be planned for any hardware projects. That same approach can be used for software and cloud services, but the phases can be more rapid because of the easier rollout and scalability.

Plans may vary by industry and your business’s circumstances, but it’s typical to buy the most basic package with the greatest flexibility first. Then, as your revenue grows, you can add bandwidth and expand your cloud storage and speed. And as personnel increases, you can implement portability and integration phases. It comes down to tying your selection criteria and implementation approach to your business objectives and the explicit assumptions about where your business and industry are going.

Kevin Conmy is regional vice president at Comcast Business. Reach him at (215) 642-6457 or

Insights Telecommunications is brought to you by Comcast Business

Additional insured — it’s a standard practice in most industries to require vendors to protect you under their insurance policies. These insurance transfers occur most frequently when hiring companies to do construction, maintenance or security, or if you’re leasing space.

“The concept is if I hire you to do work for me, I don’t want to be liable for you. I don’t want to be responsible for what you may do wrong, so I want you to cover me with your insurance” says Brian Chance, MBA, CPCU, AIC, vice president of Claims and Services at ECBM.

Over the years, the use of additional insured status has expanded to more than it was originally intended. So, the insurance industry responded by reigning in coverage.

Smart Business spoke with Chance about additional insured form changes and what this means for existing and future contracts.

When did the insurance industry change the standard forms? What has been the effect?

In April 2013, the insurance industry tightened how much coverage an additional insured can obtain. The new forms aren’t mandatory, so some carriers are still using older versions. However, if they aren’t using the new forms yet, they will soon try to integrate them in their customary practices.

It’s too soon to say how this is impacting businesses. However, the changes will take many by surprise when they discover they don’t have the coverage they thought they requested as part of a business transaction.

What is the biggest change to additional insured endorsements?

The forms now say the language in your contract or agreement governs the scope, extent and limit of coverage that the additional insured receives. For example, if you hire a roofing contractor, you might require that contractor to have $1 million of coverage and name you as an additional insured. Then, let’s say, the contractor accidentally burns down your neighbor’s $5 million building, and he or she sues you. In the past, you could use additional insured status to not only get the first $1 million but also higher limits through the contractor’s excess policies. Now, your limit is just the $1 million you requested.

Before, your contract requirements may not have been flawless, but you were able to get needed protection anyway. Under the new forms, if you are less than perfect in what you ask for, the policies won’t automatically give you what you really want.

What other changes minimize this coverage?

In addition to limits, another concern is the order the policy pays. If you go through the trouble of obtaining additional insured coverage, you want it to pay claims before your policy does. Your contracts need to require the additional insured coverage to be primary and yours to be excess.

Furthermore, carriers will only grant additional insureds the coverage that state law allows. At last count, 10 states, including Delaware and New York, don’t allow you to be an additional insured for your own negligence under another company’s policy. Those states passed statutes to stop negligent people from transferring the cost of their negligence to business partners. So, if your employee injures an employee of your contractor, that injured employee might sue your company. Before, you could use additional insured status to make the contractor pay for that lawsuit. The new language makes it harder to cherry-pick state law, limiting options when you are negligent.

Does it matter when a contract is signed?

No. You need to address this issue in your new contracts and look at existing contracts. Your existing contracts may not contain the right language to obtain the coverage you think you have under today’s policy forms. This is especially true for long-term contracts like lease agreements.

What’s the takeaway for business owners?

Any business owner who hires someone else or leases property is at risk for problems. You should review contracts and standard agreements with your risk management and insurance adviser to ensure you request the best you can get in your contracts.

It may be difficult to update old contracts, because it opens up negotiations to all terms, not just the insurance piece. You may not be able to act immediately, but if existing agreements are re-opened in the normal course of business, these additional insured insurance changes should be addressed.

Brian Chance, MBA, CPCU, AIC, is vice president of Claims and Services at ECBM. Reach him at (610) 668-7100, ext. 1325 or

Insights Risk Management is brought to you by ECBM

Chris and Natasha Ashton risked a lot to get Petplan off the ground.

“Two years of funding the business on credit cards and taking cash out on the credit cards to pay off student loans at Wharton,” says Natasha, the pet insurance company’s co-founder, co-CEO and CMO. “Two years of sleepless nights. But it proved to us that there is always a way and perseverance is the greatest strength of an entrepreneur. You can’t give up.”

It was ultimately the confidence that she and her husband, Chris, had that they would find an insurance carrier willing to underwrite their business that kept them going. But once that happened, the work of building their business didn’t end. The next step was selling the idea of buying insurance for pets.

“In the U.K. today, close to 30 percent of all pets are insured,” says Natasha, who grew up in the United Kingdom. “In the U.S., it’s hovering around 1 percent. When we were looking to enter the market, it was less than 1 percent. So it was a tremendous opportunity.”

Since the industry was so new to the United States, Natasha says it was helpful to look at what other industries did to gather ideas on how to build their own business. Petplan now has more than 100 employees and topped $50 million in revenue in 2013, but that didn’t happen overnight.

“Even though we’re a pet insurance company, we never saw ourselves as such,” she says. “From the beginning, we saw ourselves as a pet health company that happens to do insurance very well. That really allowed us to grow where others failed. We came at it from a completely different approach.”

Be cautiously bold

Chris says there were some who questioned the logic of focusing on new approaches and innovation in an industry that was still so young.

“You could argue, ‘Why are you trying to differentiate when it’s such an untapped market?’” Chris says. “But you still have to establish your reputation and what you stand for, especially if the market does get busier and larger.”

The goal was to educate people about why pet insurance is important and then demonstrate how Petplan could do it in a way that made the most sense for pet owners.

“If you’re introducing a coffee shop, people obviously know what a coffee shop is,” Chris says. “They just want to know why you’re different. With us, it’s more a question of what pet insurance is, how does it work and why do I need it? Then you get into why you’re the best pet insurance company.”

To help get the word out, the Ashtons got into the publishing business and launched a print magazine called Fetch!

“It’s now one of the leading pet health publications in the country,” Chris says. “That innovation really helped us differentiate in the marketplace.”

Selling your product or service effectively requires the right mix of boldness and restraint. The publication was a good way to get the message out on Petplan without a ton of risk.

“We have a lot of friends who are entrepreneurs, and it’s very easy to think you can spend your way to success,” Natasha says. “It’s very tempting sometimes and goodness knows there are lots of providers out there that will say they have the perfect vehicle to help you generate sales if you just hand over $1 million.

“We’ve found it’s better to do small things quickly and get out quickly if they aren’t working. And then on the flip side, if they are working, put more money into it.”

Find the right people

Another key component of Petplan’s success is the culture that requires employees to love what they do. At Petplan, that means pet lovers are welcome and those who have a tough time with animals need not apply.

“If they are not passionate about pets, we will not hire them,” Natasha says. “Your culture is the be-all and end-all. Competition will come in regardless of the industry, regardless of the market. Products will be commoditized, and all that you have at the end of the day is your brand, your culture and your service. Those are the things you have to be true to because those are what endure.”

That doesn’t mean you just have to be nice and have a bunch of dogs at home to get a job at Petplan. You need the skills to do your job, but you need to be able do that in a way consistent with the company’s culture.

When he’s interviewing prospective new employees, Chris says he looks for situations where the candidate made a difference.

“Give me an example of a situation where you made a real difference,” Chris says. “Where did you improve a process or make something better? It lets people talk about anything from their personal life to their business life. We aren’t looking for people who just want a job. We want people who want to get in here, get better and improve. Some people want to come in and just get told what to do. We want people who can think and are looking for ways to be better.”

Know your stuff

Petplan now insures more than 100,000 pets across the United States. The company continues to expand and the Ashtons see a bright future ahead.

One of the lessons that Natasha took from the experience of getting the company off the ground was the importance of preparation. It’s particularly critical when you’re asking people to invest in your business.

“You have to have the answers for everything,” Natasha says. “You have to be prepared, polished and know the industry better than they know the industry. Know your presentation inside out and back to front.”

Chris adds that you’re not just selling your business plan.

“They are investing in you the person as much as your business,” Chris says. “They have to believe in you.”

Learn more about Petplan at:

Twitter: @Petplan

How to reach: Petplan, (866) 467-3875 or

The movie “Moneyball” depicted how baseball executives were using statistics to predict outcomes, and allocating resources accordingly. Rodolpho Cardenuto, appointed president of SAP Americas in January 2013, foresees a similar approach in the business world as companies gain insights from big data.

“The only difference is that they used past statistics. The real insight is how to predict outcomes,” Cardenuto says. “I think it’s going to be a bigger revolution in business than in any sport.”

The challenge is transforming big data into actionable items. Making use of data involves taking it from infrastructure to information and then to insight. The information is already being collected, it’s a matter of how to derive useful insights from what has been gathered, Cardenuto says.

“It’s about how to get insights from the big data. We can accumulate as much information as we want. You can feed information from all over the place — social media, archives or systems — but how do you get insights from that?” he says. “Big data is about how to transform that information into something useable for the business.”

The volume, variety and velocity of data continues to grow exponentially — a compound annual growth rate of 45 is anticipated through 2015, Cardenuto says. Combined with rapid decreases in storage costs, companies are now able to store vast amounts of data.

Here’s how SAP, with its HANA database management system, is leading the charge to take that data and present relevant results to enable real-time business decisions.

Defining the parameters

Before devising a plan based on the data, you have to determine what data to focus on.

SAP employs data analysts and engages with customers to understand how they want to market to consumers so they can make the jump from big data to insights.

As an example of how that is accomplished, Cardenuto cites oil and gas companies that are SAP customers. They have wells that provide 50 terabytes of information. Using the SAP HANA application, the companies can analyze that information to determine the most cost-effective and productive way to operate the well.

“They have sensors. They can get the information they want. But the important thing here is transforming this information into insights to better utilize this well’s potential,” Cardenuto says.

Another client, a retailer in Mexico, analyzes data once or twice a week to see which products are selling, he says. That data is used to manage logistics and deliver products to stores.

“If I have a TV set that is selling in one store, I can reroute my logistics, my supply chain, to deliver more TV sets to that specific store and from other stores where they are not as much of a bestseller,” Cardenuto says.

While the same process had been followed previously, the cycle took up to three days to complete. That lag meant that there was no guarantee that there would still be the same product demand, particularly if the item were part of a current promotion, Cardenuto says.

“Now they can do that in real time,” he says. “Only with real-time HANA can they do that.”

Another SAP product, Precision Marketing, which used to be called Precision Retailing, is an application that pools historical consumer data. For example, Wal-Mart could use it to find what products customers purchased and at what time.

It can also provide detailed information about customers such as a female between the ages of 25 and 30, with or without children, employed or not, even whether a person prefers organic foods.

Of course that sort of information appeals to retailers, but it has also been used by a transit agency in Montreal, Canada, Cardenuto says.

Cardenuto envisions data analysis being taken a step further to determine why there was more demand in one region in order to predict future demand spikes. He says such predictive modeling is definitely on the way.

Along with big data and real-time insights, Cardenuto sees cloud computing and simplification as two trends that will be the focus of CEOs in 2014.

“The cloud is enabling customers to have access to new innovation as well as a return on their investment in technology faster than ever before, in weeks instead of years,” Cardenuto says.

That means businesses that adopt cloud technology can redirect those returns to investments in other technologies and business models that fuel innovation and growth.

“The cloud can be an important catalyst in any enterprise. It offers a simpler delivery model to accelerate the adoption of innovation,” Cardenuto says.

Simplification is important because complexity is a significant challenge that businesses face today, according to Cardenuto. Whether it’s in business processes or user experience, complexity slows everything down and results in longer business cycles, frustrated users and unhappy customers.

There are more mobile connected devices than there are people, making it critical to develop a simple user interface that provides a personal experience, he says.

“We have made simplification our focus. We are simplifying everything, so our customers can do anything,” Cardenuto says. “With technologies like cloud and HANA as a platform to tackle big data and integrate across applications, businesses can achieve faster innovation.”

Finding inspiration for innovation

Innovation is key for any company, but where do you look for inspiration?

At SAP, executives pay attention to research coming out of universities, venture capitalist investment areas and startup companies. They also work with customers to better understand how technology changes can help them improve business processes.

“We also leverage design thinking to ensure our solutions are user-centric, so users get maximum value from them,” Cardenuto says.

Before being named president of SAP Americas, Cardenuto had served as president of SAP Latin America for five years and established SAP as an innovation provider of choice for companies of all sizes in a variety of industries.

Cardenuto says SAP works directly with customers on new products, finding companies that are willing to adopt technology that is in the prototype phase.

“If we find ourselves with something that grows and appeals to more and more customers, we commercialize it,” he says. “We could say it’s a learn, build, measure, learn methodology.”

That timetable for the process continues to shrink as technology evolves.

“Through process simplification, we are doing this faster and faster. In fact, we can take innovations from concept to market in as little as five months — that’s as fast as leading startups,” Cardenuto says.

Adapting to millennials

Perhaps an even bigger challenge than tackling big data or continuing to innovate is adapting to the impact millennials, typically defined as those born between the early 1980s to the early 2000s, are having in the workplace.

Cardenuto says that’s the biggest challenge he’s faced in his career as a leader and one every business has to tackle, regardless of industry.

“Leaders in every industry and sector are also confronting it,” he says. “It’s about a fundamental change that is taking place in the workplace and the marketplace, as millennials emerge as the largest generation since the baby boomers.”

Within 15 years, millennials will represent 75 percent of the global workforce and will have amassed the greatest purchasing power in history at $2.45 trillion worldwide.

“As our current and future employees and bosses, and present and future customers, their impact transcends numbers: It’s about how they embrace technology and the digital world,” Cardenuto says.

Millennials are highly mobile and social, which is driving employers at many businesses to rethink traditional models.

“They are probably the most educated generation ever and are already shaping corporate culture. How you hire, retain and engage them is both a challenge and an opportunity,” Cardenuto says. “That is why I am intensely focused on putting the best strategies in place to fit our early talents.”

Company leadership needs to ensure that it attracts and motivates millennials, he says.

“We have put programs in place that expose young, high potential employees to diverse business situations and allow them to be bold, innovative and engaged. We mentor and are reverse-mentored by them. We strive to keep our workforce flexible, and enable them with our best training programs,” Cardenuto says.

Millennials, with their understanding of and comfort with technology, will be an important part of teams leading innovation and shaping the future of companies.

“Above all, we try to listen and learn from their ideas, beliefs and contributions — how they use technology, push to crowdsource ideas, and expect it all to run faster, smarter and more sustainably,” Cardenuto says. 


  • Transform information to insights.
  • Understand customers so you can provide solutions.
  • Adapt your business model to address millennials.

The Cardenuto File:

Name: Rodolpho Cardenuto
Title: President
Company: SAP Americas

Born: Sao Paulo, Brazil

Education: He received a bachelor’s degree in electronic engineering from Centro Universitário da FEI (Faculdade de Engenharia Industrial) in Sao Paulo, Brazil, an executive MBA from the Business School Sao Paulo (BSP) and a master’s in international business from the University of Toronto.

What was your first job and what did you learn from it? About 25 years ago I was a systems analyst at a bank in Sao Paulo, working the night shift —11 p.m. to 7 a.m. I worked at night and went to school during the day; my first class started at 7:30 a.m. Getting to class on time was a challenge, so I saved up to buy my first motorcycle. Aside from developing a longstanding passion for riding motorcycles and learning to get by on very little sleep, my first job taught me the importance of hard work, perseverance and disciplined time management.   

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Monday, 10 March 2014 01:46

How to keep the 'family' in a family business

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Some firms owned or dominated by family have achieved monumental success. Others have found the transition process to be more difficult. Relentless competition and struggle for customer loyalty, combined with the thorny issues of family dynamics, prove challenging.

When preparing to transfer a family business, the first step is making certain each successor is fully committed. Talk to them well in advance and explain the benefits and pitfalls from the perspective of an owner.

Prior to joining the family business, outside employment in a related field is beneficial. “Working for an accounting, finance or legal firm can help a member of the younger generation gain confidence and stature while attaining valuable knowledge,” says Howard Greenberg, managing member of Semanoff Ormsby Greenberg & Torchia.

Smart Business spoke with Greenberg about the characteristics of different generations, family dynamics and the importance of outside help.

How would you describe a typical entrepreneurial founder?

Typically, entrepreneurial founders do not have significant resources, but they do have lots of resourcefulness, drive and passion for the business, talent, and willingness to work very long hours with little pay. These characteristics, along with an intense drive to succeed, help an entrepreneur create something that can be passed on to the next generation.

What characteristics does the second generation typically possess?

The second generation watched Dad and/or Mom exert their efforts into their venture, witnessed their passion, and it rubbed off on them. They feel the responsibility to further the business and want to look good for their parents. Although they might not have quite the same drive, they may have the privilege of greater resources and more education. They are often successful at maintaining, growing and managing the business.

What changes with the third generation?

This is where problems arise and where some outside help is required. Often, the third generation has more resources, more education and more alternatives than the founding patriarch/matriarch had. But they may have other interests, lack the same abilities, and there are usually more of them.

How should management issues be handled?

You shouldn’t staff your business based on family. Staff it based on talent. Perhaps your family has talented managers, or people in finance. If not, you need to fill the gaps in with non-family members. Similarly, if the third generation isn’t ready to take the reigns, bring in interim managers as caretakers until the younger generation is ready for its role.

What problems can arise with shared third-generation ownership?

The people who run the business often resent producing for the people who just inherited the business. Conversely, those who inherited the business often resent those who run the business because of their salaries and compensation.

It may be better to provide the people not actively running the business with other assets from the estate. To reward long-term performance for a successor generation running the business, it’s advised that the company recapitalize to lock in the current value with preferred interests. This provides the generation ceding control with the value of their interests, and provides the next generation to control with the value of their future contributions. Include these provisions in shareholder and operating agreements as well as employment agreements and continuation plans.

Why use outside consultants?

It’s nearly impossible for the first or second generation to objectively evaluate the talents and value of their children. And if the second generation comprises more than one sibling, there will be arguments concerning rewarding the third generation and picking leaders. And trying to make things equal for everyone is a mistake because people are not equal. Outside advisers can help make those decisions objectively. They can assist in preparing the comprehensive agreements that are carefully tailored to the particular family business. Doing this in advance of the generational transition is highly recommended.

Howard Greenberg is a managing member of Semanoff Ormsby Greenberg & Torchia, LLC. Reach him at (215) 887-3042 or

Insights Legal Affairs is brought to you by Semanoff Ormsby Greenberg & Torchia, LLC

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